Wednesday’s Word: Neutral

By Dylan Donley, Spring 2014 Graduate Research Assistant

The term neutral as used in terms of FINRA arbitrators and mediators, refers to a mutually agreed upon impartial intermediary that has no financial, official, or personal interest in the investment dispute over which the parties are being requested to proceed. FINRA Rule 12405(a) states the type of disclosures a FINRA arbitrator must make if there are circumstances which might preclude the arbitrator from rendering an objective and impartial determination in the proceeding.